Will Oracle ERP+SCM cloud expand to PLM service?

Modern technological changes are reshaping the way enterprise systems are organized and operating. At the time, internet, mobile phone and cloud services changed the way we drive, do shopping and plan our vacations, many businesses are still trying to figure out how to apply these technologies to improve their operation. And IT departments of these companies are looking how to build technological stacks to support new digital business environment.

My attention was caught by Oracle whitepaper speaking about modern end-to-end supply chain. Navigate here to read more. The following video gives you an idea what is about.

I can see a point to combine supply chain activity with ERP by connecting data in an integrated cloud based SCM+ERP environment. Another Oracle article gives you an idea for possible strategies of better supply chain. Read the article. The one that stood out for me was about optimizing product design and product management for supply and manufacturing. Here is the passage:

Strategy 3: Optimize product designs and product management for supply, manufacturing, and sustainability to accelerate profitable innovation. Innovation is crucial for being one step ahead of the competition. But innovation doesn’t exist in a vacuum. To be successful, products must be manufactured at the right cost, place, and time. Decisions made in the early cycles of product development can make or break the product. Designs must be optimized for supply, manufacturability, and supply chain operations. All true costs to deliver must be accurately captured and analyzed to maintain balance across the end-to-end business.

As much as I can respect the ideas of integrating ERP and SCM function, these systems usually have nothing to do with product design and product management. This is where PLM is usually applied. The core of this systems that connects product design with manufacturing environment is engineering bill of materials (BOM). By integrating design data into engineering BOM and connecting it to production planning, you can get an insight into product cost, manufacturability and other decision data points.

Are we going back to the idea of one giant system management all aspects of product design, engineering, manufacturing and supply chain? Actually not. In the old traditional world, you would be right by assuming data is located in single databases. Not any more. Cloud is the differentiation factor in this new change. Integration of cloud services (Oracle nicely call them “clouds”) allows to manufacturing companies in 21st century to step beyond PLM, ERP, SCM and traditional enterprise software paradigms. New paradigm will connect companies and teams to create virtual engineering and manufacturing organizations.

What is my conclusion? To improve manufacturing business, you need to think about end-to-end processes. The optimization of ERP and SCM is not enough. Only by connecting PLM aspects of product development such as design and derivative engineering bill of materials you can connect silos of product development and make great impact on operation and cost. Just my thoughts…

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